Coupa Software (COUP) is down 13.9% since last earnings report: Can it bounce back?

IIt has been approximately a month since the last Coupa Software (COUP) earnings report. Shares are down about 13.9% over the period, underperforming the S&P 500.

Will the recent negative trend continue into the next earnings release, or is Coupa Software poised for a breakout? Before we dive into the recent reaction from investors and analysts, let’s take a quick look at the most recent earnings report to get a better handle on the key drivers.

Coupa Software beats Q1 earnings and revenue estimates

Coupa Software reported healthy results for the first quarter of fiscal 2023, beating both revenue and earnings estimates. The findings were supported by Coupa, which provides organizations with visibility and control over their business spend, resiliency in back-office operations, and assistance in making strategic and data-driven decisions to drive positive outcomes for their business.

Quarter Details

Reported GAAP net loss during the quarter attributable to Coupa Software Incorporated was $81.5 million, or $1.08 per share, compared to $100.4 million, or $1.38 per share in the prior-year quarter. Non-GAAP net income for the quarter was $5.5 million, or 8 cents a share, compared to $5 million, or 7 cents a share, in the year-ago quarter, beating the Zacks Consensus estimate by 3 cents.

Revenue for the quarter was $196.4 million compared to $166.9 million in the year-ago quarter, representing 17.6% year-over-year growth and beating Zacks’ consensus estimate of $196 million. Growth was aided by the success of the Antares app, which offers customers the flexibility to access supplier risk at the time of procurement, monitor third-party data and provide instant visibility into supplier risk scores.

Subscription revenue reported during the quarter was $178.5 million versus $140.1 million, representing a 27.4% growth over the same quarter last year. The growth was supported by the strengthening of the US dollar against the euro. Professional services revenue for the quarter was $17.9 million compared to $26.8 million, down 33.2%.

operational details

Gross profit for the quarter was reported at $115.5 million compared to $87.2 million in the same quarter last year, an increase of 32.4%. GAAP operating loss was $71.3 million for the quarter compared to $73.9 million in the same quarter last year. Non-GAAP operating income for the quarter was $13.8 million compared to $7 million for the same quarter last year.

Cash Flow & Liquidity

In the fiscal first quarter, the company generated $49.7 million in cash flows from operations, compared to $32.1 million in the same quarter last year. As of April 30, 2022, the Company had $493.9 million in cash and cash equivalents with net convertible senior debt obligations of $2,157.9 million.

guidance

For fiscal 2023, the company has raised its revenue guidance to $838-848 million from $836-840 million. Subscription earnings are expected to be between $762 million and $767 million. Professional services and other revenue is expected to be approximately $76 million. Non-GAAP earnings should be in the 21 to 27 cent per share range.

Total revenues for the second quarter of fiscal 2023 are expected to be in the range of $202 million to $205 million. Subscription revenue is expected to be between $185 million and $188 million, and professional services and other revenue is expected to be approximately $17 million. Non-GAAP net income is expected to be in the range of 7 to 10 cents per share.

How have the estimates evolved since then?

Over the past month, investors have seen an uptick in reviewing estimates.

The consensus estimate has shifted -6.17% due to these changes.

VGM results

At this point, Coupa Software has a good growth score of B, although it lags badly on Momentum Score at an F. After exactly the same price, the stock was assigned an F grade on the value side, in the fifth quintile, to put it, for this investment strategy.

Overall, the stock has a total VGM value of D. If you are not focused on one strategy, this is the value you should be interested in.

outlook

Estimates for the stock are trending higher, and the magnitude of these revisions look promising. Specifically, Coupa Software has a Zacks Rank #3 (Hold). We expect a linear return on the stock over the next few months.

performance of an industry player

Coupa Software is part of the Zacks Internet software industry. Over the past month, Veeva Systems (VEEV), a stock in the same industry, is up 7.9%. The company released its results for the quarter ended April 2022 more than a month ago.

Veeva reported revenue of $505.1 million for the most recent quarter, a +16.5% year-over-year change. EPS of $0.99 for the same period compared to $0.91 a year ago.

Veeva is expected to report earnings of $1.01 per share for the current quarter, a +7.5% year-over-year change. For the past 30 days, the Zacks consensus estimate has remained unchanged.

The overall direction and magnitude of estimate revisions result in a Zacks rank of #3 (Hold) for Veeva. Also, the stock has a VGM score of C.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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